tets 3

The primary objective of financial accounting is to:

• Serve the decision-making needs of internal users.

• Provide accounting information that serves external users.

• Monitor consumer needs, tastes, and price concerns.

• Provide information on both the costs and benefits of looking after products and services.

• Know what, when, and how much product to produce.

The accounting concept that requires every business to be accounted for separately from other business entities, including its owner or owners is known as the:

• Time-period assumption.

• Business entity assumption.

• Going-concern assumption.

• Revenue recognition principle.

• Measurement (Cost) principle.

The difference between a company's assets and its liabilities, or net assets is:

• Net income.

• Expense.

• Equity.

• Revenue.

• Net loss.

The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called the:

• Balance sheet.

• Statement of owner's equity.

• Statement of cash flows.

• Income statement.

• Statement of financial position.

A record of the increases and decreases in a specific asset, liability, equity, revenue, or expense is known as a(n):

• Journal.

• Posting.

• Trial balance.

• Account.

• Chart of accounts.

The right side of a T-account is a(n):

• Debit.

• Increase.

• Credit.

• Decrease.

• Account balance.

A double-entry accounting system is an accounting system:

• That records each transaction twice.

• That records the effect of each transaction in at least two accounts with equal debits and credits.

• In which each transaction affects and is recorded in two or more accounts but that could include two debits and no credits.

• That allows total credits to be greater than total debits.

• That allows total debits to be greater than total credits.

A list of all ledger accounts and their balances at a point in time is called a(n):

• Account balance.

• Trial balance.

• Ledger.

• Chart of accounts.

• General Journal.

The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is:

• Cash basis accounting.

• The expense recognition (matching) principle.

• The time period assumption.

• Accrual basis accounting.

• Revenue basis accounting.

Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are:

• Intangible expenses.

• Prepaid expenses.

• Unearned expenses.

• Net expenses.

• Accrued expenses.